Can Funds Be Added to an Existing Roth IRA?
An Roth Individual Retirement Account (IRA) allows you to personally save for retirement. Once set up, funds can be added to your Roth IRA provided that you meet certain parameters. The benefit of a Roth IRA is tax-free growth of your investment.
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Annual Contributions
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The maximum amount you can contribute to your existing Roth IRA is $5,000, or $6,000 if you are older than 50. There is no age limit for making contributions to your Roth IRA. Unlike the traditional IRA, you may continue adding funds after you reach age 70½.
Modified Adjusted Gross Income
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Your modified adjusted gross income (AGI) may restrict your Roth IRA contribution. If you are single or file as "head-of-household," you can contribute the full amount if your modified AGI is $116,000 or less for tax year 2008. If you file jointly, full contributions are allowed if your modified AGI is $169,000 or less.
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Compensation
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You must have compensation income to contribute to your Roth IRA. According to the IRS, compensation includes "wages, salaries, tips, fees, bonuses, commissions, and self-employment income."
Other Restrictions
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If you also contribute to a traditional IRA, your Roth IRA contributions will be limited. The maximum limits described apply to both accounts. If you contribute $4,000 to a traditional IRA, you may only contribute $1,000 ($2,000 if older than 50) to your Roth IRA in the same year.
Time Frame
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You can add funds to your existing Roth IRA any time during the year. Additionally, you can add funds up to your income tax filing due date (typically April 15) for the previous year.
Additional Information
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IRS Publication 590 contains all the rules and regulations regarding adding funds to your Roth IRA as well as worksheets for calculating your modified AGI (See Resources).
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